DETROIT — The wave of easy credit and longer auto loans has left a record percentage of consumers trading in vehicles that are worth less than what they owe on their loans.

In auto finance parlance, these folks are underwater, or upside down. They already are affecting the market as automakers boost incentives and subprime lenders monitor their delinquency rates more closely.

So far this year, a record 32%, or nearly one-third, of all vehicles offered for trade-ins at U.S. dealerships are in this category, according to research by Edmunds.com. When these people go to buy a new vehicle they must add the difference between their loan balance and the vehicle’s value to the price of the one they want to buy.

For perspective, the lowest the underwater percentage has been was 13.9% in 2009, the depths of the Great Recession when credit was tight. The previous high was 29.2% in 2006, about when the housing market was near its frothiest point.

“There’s been a lot of water building behind this dam for some time because of higher transaction prices, lower down payments and long-term loans,” said Greg McBride, chief analyst with Bankrate.com, a consumer finance information service.

The average new car loan is for 68 months, according to Experian Automotive, which tracks the auto finance market. But subprime borrowers, generally those with FICO credit scores in the low 600s or lower, are borrowing over an average of 72 months, or six years.

While those loans reduce monthly payments, they also mean that the buyer’s equity, or the portion of the loan principal paid off,grows more slowly than the vehicle depreciates.

“It’s problematic for the consumer because there’s no foolproof way to eliminate his financial exposure,” McBride said. “If the car gets stolen, is totaled or you get new car envy while you’re upside down then it’s a big problem.”

This is happening as the average selling price of a new vehicle is near a historic high of about $34,000. Some of that increase is driven by consumers’ preference for larger, fully equipped pickups, SUVs and crossovers.

The result is consumers borrow more to get the vehicle they want. The average new auto loan was $29,880 in the second quarter of this year, according to Experian Automotive. That’s 4.8% higher than a year earlier.

Moreover, leasing, which has reached record levels of more than 30% of all vehicle sales, has grown more popular for several years.

Already, especially in segments such as subcompact, compact and midsize cars, used car values are falling as a wave of 3-year-old models are returned by lessees. This increased supply is pushing down the price dealers are willing to pay for them at auctions.

Just last week, Ford Chief Financial Officer Bob Shanks told analysts that the company’s finance arm, Ford Credit, cut its forecast for 2017 pretax profits because of declining auction values for used cars.

Credit agencies, such as Moody’s, Standard & Poor’s and Fitch, so far, have expressed mild concern about the trend. Their focus is on the $38-billion market for securities backed by auto loans. These are bundles of auto loans, similar to the tranches of mortgages that collapsed in the 2008 crash of the housing bubble.

But they are also different. History shows borrowers are more likely to stay current on their car loans than on their house payments if the economy weakens. Lenders can repossess automobiles more quickly than it takes for mortgage holders to foreclose on a house.

Fitch reported that 60-days-plus delinquencies on subprime auto loans rose to 5.05% in September, the second highest level since 2001, and 13.2% higher than a year earlier.

“When you look at recessionary levels where unemployment was near 10% in 2009 and late 2008, we touched 5.04%,” said Hylton Heard, senior director at Fitch Ratings. “Today you’re pretty much at that peak.”

Fortunately, unemployment is down to 4.9% nationally. Prime borrowers have a 60-day delinquency rate of only 0.44%. Those factors tend to offset the higher risk in the subprime market.

New vehicle sales are expected to continue slightly below their record year-ago levels in November, according to J.D. Power and LMC Automotive.

Yet even their forecast flags some warning signs.

Incentive spending — discounts or extras to lure buyers to close a deal — in early November rose to $3,886 per vehicle, up 15% from $3,374 from November 2015 and the second-highest level ever behind the record $3,939 set in September.

“People’s monthly payments are being kept very low by low interest rates that most manufacturers are willing to subsidize,” said Ivan Drury, senior analyst at Edmunds.com. “But if we see those rates go up a bit, some of these people won’t be able to afford their cars.”

From The Detroit Free Press comes this story by Zlati Meyer on Aug. 29.

They wear helmets.

They’re told not to play with matches.

They’re warned not to talk to strangers.

But this is one crime it’s tough to protect them from.

Children are the newest victims of identity fraud — and sometimes, they don’t even know they’ve been exploited.

How to guard your children from identity thieves

Don’t give out their Social Security numbers. If you’re asked for it, find out if it is mandatory information. If it is, ask who has access to it and how the data, be it a paper form or an online database, is kept safe and, when no longer needed, destroyed.

Protect their dates of birth and mothers’ maiden names.

Have a talk with older children about the importance of keeping private information private. Instruct them to ask you for permission before sharing it with people who ask them for it.

Freeze their credit with the three credit reporting agencies: Experian, Equifax and Transunion.

By Anita Zinsmeister, President of Dale Carnegie®Training of Central & Southern New Jersey

But FIRST: Tips for holiday shopping —

Here are four things you should not buy on Memorial Day. You won’t get the best prices, according to NerdWallet research. They are barbecues, pools, swimsuits and camcorders. And don’t let the sale-shopping mentality overtake common sense. Lots of products will be discounted, but not every discount will be a good deal. (Thanks to USA Today – May 24, 2015 for this.)

From everyone at Dale Carnegie® Training of Central & Southern New Jersey, we would like to wish you and your family a happy Memorial Day.

While enjoying time with your family and friends this coming weekend, take a moment to remember the heroes who have fought for our great country.

A Little About Memorial Day . . .

Memorial Day, originally called Decoration Day, is a day of remembrance for those who died while in service for the United States of America.

Over two dozen cities and towns claim to be the birthplace of Memorial Day. While Waterloo, NY was officially declared the birthplace of Memorial Day by President Lyndon Johnson in May 1966, it’s difficult to prove conclusively the origins of the day.

Preheat your grill 15 to 25 minutes before you start cooking to make sure it reaches the right temperature (and to kill any bacteria). A properly heated grill sears foods on contact, keeps the insides moist and helps prevent sticking.

How To Clean Your Grill Grates:

Do you want to clean your grill grates this coming weekend? Click here for a link to the amazingribs.com website. It’s filled with some easy grill cleaning techniques.

Prevent Sticking:Reduce food sticking to your grill by oiling your hot grill rack with a vegetable oil-soaked paper towel: hold it with tongs and rub it over the rack. (Do not use cooking spray on a hot grill.)

Marinating:This does more than infuse food with flavor; it also inhibits the formation of potentially carcinogenic HCAs, which form when grilling “muscle meats” like poultry, red meat and fish; marinating can reduce HCAs by as much as 92-99%.